How are they able to do this now? Didnt they make a live album with most of their well known songs because they couldnt release a greatest hits album due to their old label owned the rights? Or is the fact they are rerecording them the loop hole?

With a typical recorded song there are 2 different unique owners. for simplicity sake this is a very generic example which assums a band signed to a record label:

1. The recording (owned by the record label)
2. The song itself (owned by the person who wrote)

So thinking about 'Sell Out' by RBF that appeard on TUrn The Radio Off:

1. Mojo/Jive owns the recording RBF made for the record
2. RBF owns the song they wrote.

Ok so technically, nothing could have stopped them from doing an album like this in place of the live album they did a few years ago?

They were probably contractually obligates not to rerecord the songs for a certain number of years without permission. Typically it's 10 years...

Hence the Jimmy Eat World Clarity Live was essentially rerecordings of the entire album but not released on the label. But I'm sure that they probably gave them the option of releasing it. A live version of an album that, by "commercial standards"**, was a failure is not one a label is much to invest in.

**note the use of "commercial." In My Opinion, Clarity is one of the best albums ever released.